July 26, 2007

Scott Turow on Billable Hours

In a cover story in the ABA Journal, Scott Turow offers a rather powerful critique of billable hours. Of course, criticism of billable hours is nothing new; academics and practitioners have offered important critiques for years.

But Turow reminded me of the argument, made elsewhere, that billable hours create a kind of conflict for many lawyers under Rule 1.7. Namely, a lawyer may have a financial interest in billing more time, even though the client won't benefit from the extra lawyering.

Of course, there are ways around the doctrinal point. But the concept seems right to me: there is needless lawyering that takes place under a billable hour system.

The problem, inevitably, is developing a system that creates better incentives. Contingency fees can create problematic incentives, as can other fee-generating structures.

Increasingly, firms are experimenting with mixes of contingencies, flat fees, and other methods in specific matters. Do any readers who are on the front lines have any thoughts as to what fee structures most effectively align the interests of lawyers and clients?

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Scott Turow on Billable Hours

In a cover story in the ABA Journal, Scott Turow offers a rather powerful critique of billable hours. Of course, criticism of billable hours is nothing new; academics and practitioners have offered important critiques for years.

But Turow reminded me of the argument, made elsewhere, that billable hours create a kind of conflict for many lawyers under Rule 1.7. Namely, a lawyer may have a financial interest in billing more time, even though the client won't benefit from the extra lawyering.

Of course, there are ways around the doctrinal point. But the concept seems right to me: there is needless lawyering that takes place under a billable hour system.

The problem, inevitably, is developing a system that creates better incentives. Contingency fees can create problematic incentives, as can other fee-generating structures.

Increasingly, firms are experimenting with mixes of contingencies, flat fees, and other methods in specific matters. Do any readers who are on the front lines have any thoughts as to what fee structures most effectively align the interests of lawyers and clients?